Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Thanks for the link. Article states Indian government have asked 'domestic manufacturers' to step up and supply the tests. GDR definitely have strong distributor links into India but I dont think they have manufacturing capacity in the country. Or can manufacturing capacity be re-tooled to produce the beads with raw ingredients and IP shipped in? I dont know enough about how this might work but seems to me that GDR are not in the mix if the article is correct and the focus is on domestic Indian manufacturers to supply the tests unfortunately!
unusual to see such a large trade in GEEC. Definitely a purchase order. With full year results due in June or July seems someone is confident. Saying that, whilst results for the year to March 2020 should be fine and not much affected by the covid 19 lock down in India, the outlook for 2021 has to be bad given the gas glut and weakness in prices as well as the hiatus in industrial activity. On the upside, government is keener than ever to expedite the transition to gas (from coal and fuel oil) for the economy and work is restarting on building out the interstate and intracity pipeline networks. GEEC may also soon get the clearance needed to test for shale gas on its acreage which could significantly increase volumes if its profitable to extract, (the application for permit has been pending for over a year now).
There is a huge disparity with GEEC between the value of the underlying resource and the current enterprise value. The resource is largely derisked as well with potential significant upside from shale gas resources beneath the coal bed methane. The management and family own nearly 70% of the available stock so there really are not many shares and the Indian government are committed to raising the share of gas to 15% (from 6% now) of energy mix by 2030 with emphasis on both domestic supply and LNG imports.
Only problems are 1) Its India and they seem unable to move anything forward quickly even if they know they want to do it.
2) Company seriously needs to find a new CEO and not keep sticking with the incumbent who is a Modi family member. With hundreds of millions of potential value at pay with the Modi family 70% stake you would think that they would sacrifice their own in order to realise this value
or c£85m if you include the convertible loans. (albeit that at current share price the £1.50 conversion price loan will not be exercised)
report and accounts will give you the details in the notes section. One aspect to consider....whilst technically correct to fully dilute and include the addition shares from conversion of the convertible so the 65m odd shares if we receive a large special dividend from the cash generated near term from Sars Cov 2 tests then convertible loan holders wont be eligible for this as they wont have converted by time share price goes ex special dividend. So distributed across only 45m shares. I have no idea if holders can convert early though once they hear there is a special divi on the way!
Its another milestone achieved for sure and well done to GDR for getting here in this timeframe, but the line 'The Company will now begin distribution to potential customers for initial clinical evaluations, and aims to record first commercial sales in June. ' is the one that could limit the upside for now. Clarity on scale of sales is obviously key to realising full value and if clinical evaluations are just beginning now then we have another few weeks to wait until orders turn into reported sales. Definitely a few 10s of % today though so cant be disappointed with that.
Mr Budd, I emailed a question to your investor relations people a few days ago, so now i have your attention on this board any chance of an answer? Also could you give hargreaves lansdown a nudge to sort out broker placing option allocations? HL are restricting my funds and still telling me its a pending order!
Got to love lockdown and people getting creative to amuse themselves
Not quite true Maka. We have had the announcement of WHO prequalification since Covid19 drove the share price up, but granted the shares will drop a lot if it transpires that there is no buyer for GDRs test. The longer-term value of GDR easily exceeds current market cap to my mind without any contribution from Sars Cov 2 test but suspect many on this board now are not here for the longer-term.
Maybe also just a point in response to comments about other tests being developed and no guarantees that GDR's will find a buyer. I don't think anyone disputes this. No buyer of the GDR test then the share price collapses but if you want certainty then put your money in a bank account at 0.025%. Markets try to discount an uncertain future. that's what investing is all about. Once we have a certainty of either lots of demand or no demand for the GDR test the share price will be nothing like it is now, instantly as soon as that certainty is apparent. Price the future that you think is going to occur and compare it to the current share price. Invest or short accordingly.
I managed to find a bit of extra cash this morning. called my broker and they confirmed that they are taking new orders and amendments to exiting orders until 16.00hrs this afternoon and that the book closes at 17.00hrs. No indication given as to when i/we will here on allocations and I suspect that there will therefore be an RNS tomorrow morning.
Ceejay. Boris has stated 200,000 tests per day target. Thats 1.4m a week. so to the end of the year that would be around 34 weeks. so somewhere in the region of 50m tests. Assume £8 per test (low end of guidance given by GDR) then thats £400m. If GDR take a 25% royalty then that would be £100m to the company by end of 2020.
Keep in mind that there are around 1bn people across the worlds most developed economies so the total demand for tests at the same level as the UK is many multiples of this. much more than GDR can supply. In fact it would take around 10 GDRs at 250,000 tests per day to supply just the most developed countries for the next year.
Incredibly I've managed to miss all the action this week given distractions elsewhere. When you've been a holder for 10 years you get a bit jaded regularly checking on GDR. Anyway this seems pretty simple to me. Plenty of people here thought this company was worth £200m to £300m before the placing (some thought it was worth more). The extra cash from the placing only makes it more likely that the company is now worth this amount, not less likely! So taking the £200m low end value we now need to divide by a fully diluted 60 m shares (35m in issue currently, 10m in placing and roughly 15m convertible loan stock and outstanding options). this gets me to £3.33 a share - give or take a few pennies. Given the update we got with the placing news does anyone really think the company is worth less now than they thought it was before the placing? CE mark, firm orders update, FDA approval newsflow to come over next few days/weeks which if positive goes a long way to derisking that £3.33 per share valuation. Sure there will be some technical issues to work through very short term but the only thing that has really changed here is that the £200m valuation most people thought was reasonable before is now even more reasonable.
Thanks Technick. definitely an option and thanks for highlighting. ANy view on the immune response test for early infection detection?
Interesting article here:
https://www.theguardian.com/world/2020/may/01/us-germ-warfare-lab-creates-test-for-pre-infectious-covid-19-carriers
Couple of observations. 1) US market could be up to 1m tests per day - that's the good bit. 2) This test could detect Covid19 days earlier than leading swab based tests - that's the bad bit.
Emergency FDA approval, if granted, could see rollout of this test from mid May. Lots of questions here but does anyone have any insights on this and likely accuracy of early immune response detection as well as practicalities of mass blood testing, cost etc?
I'm also wondering whether GDR swab test can perform better than other swab tests with greater accuracy on low viral loads associated with earlier infection? This might help negate some of the advantage of this blood test.
Also why did GDR not announce that they are seeking accelerated FDA approval as well as CE mark? CE mark wont cut it in US which seems like an obvious market to target. Any thoughts on all of this would be most welcome for those reading the quieter weekend board. Many thanks in advance
Posting this again. Yes it will. Massively more testing than we are seeing now.
https://www.cnbc.com/2020/04/21/coronavirus-tests-rockefeller-plan-would-screen-millions-for-covid-19.html
Rockerfeller Foundation very influential. GDR partnered with leading US diagnostics company with additional credibility and endorsement provided with significant US Department of Defence orders. Clear on timelines being talked about that testing ramp up has many more months to run so GDR has not missed the boat. We're all familiar by now with the commentary on the scale of the opportunity but look at the numbers involved.
US facing $300bn to $400bn in economic losses a month from this virus and this will only deepen as confidence drains away the longer we continue without getting to a point where we can reopen large sections of the economy fully again. Article highlights that $100bn funding for increased testing is a price well worth paying to enable the economy to reopen. Multiples of this figure globally.
As long as GDR and Cytiva can develop the test successfully and can negotiate access to government shortlists to supply in multiple countries then GDR could be playing a major role in getting the global economy off its knees as well as saving so many lives. how much is that worth?
Rolled up interest payments on all convertibles look to run until Dec 2021 and Jan 2022.
Apologies, to be clear
$2.5m BGF loan converts at 28.75p maturing on June 30th 2025
$2m and $6m tranches of GHIF loan converts at 28p and 150p respectively maturing Dec 2023
Look like £2.5m loan that matures on 30 June 2025. Deed of Amendment were to extend the maturity of the GHIF Bond by 30 months to December 2023. and exercise prices are:
.
as per the report and accounts for 2019
I posted this a few months ago on convertible loans.
'One point also to keep in mind when valuing the potential for the company is that there are £8m of so of convertible loans and some options out there which will dilute the number of shares in issue in the future. Quick rough calculation looks to be an eventual 50m or so of shares if all convertible loans convert to equity, (which they obviously will do if things go well as the conversion prices for the older loan was recently reduced to 28p (for £2m) and 150p (for £6m).'
They will obviously be converted if the price rises further from here and therefore no debt going forward after that. I suspect that some of the gains from this conversion will be sold back to market but don't see this as an issue unless they all hit at once. Something to keep in mind but certainly not to worry about. Best bit is that conversion removes the requirement to repay the loan.
https://www.cnbc.com/2020/04/21/coronavirus-tests-rockefeller-plan-would-screen-millions-for-covid-19.html
Rockerfeller Foundation very influential. GDR partnered with leading US diagnostics company with additional credibility and endorsement provided with significant US Department of Defence orders. Clear on timelines being talked about that testing ramp up has many more months to run so GDR has not missed the boat. We're all familiar by now with the commentary on the scale of the opportunity but look at the numbers involved.
US facing $300bn to $400bn in economic losses a month from this virus and this will only deepen as confidence drains away the longer we continue without getting to a point where we can reopen large sections of the economy fully again. Article highlights that $100bn funding for increased testing is a price well worth paying to enable the economy to reopen. Multiples of this figure globally.
As long as GDR and Cytiva can develop the test successfully and can negotiate access to government shortlists to supply in multiple countries then GDR could be playing a major role in getting the global economy off its knees as well as saving so many lives. how much is that worth?
Finncap moving fast. suspect 2 or 3 commercial assets managers been lined up for a while and are now stating their price to take stock in a placing. Things like this often leak ahead of the announcement. Once cash no longer a problem though then share price will re-rate over time as opportunities crystalise into revenues and profits regardless of what happens with Sars Cov 2 test. We will just have to share those profits with a few additional shareholders. Just my take.
When thinking about valuations need to also keep in mind the convertible loans that are in issue at the moment. I posted on this many months ago so cant quite remember the details but I think the total issued number of shares would rise to 50 million if all the convertibles were exercised and converted into equity and the exercise prices were at around 80p and 150p I think, but worth checking that. Still great upside here, you just have to remember to divide the total company value by 50m shares not 35m. market should in theory discount this anyway.
Think that is right Scart. If GDR was currently in a bid situation with a prospective buyer looking to acquire a controlling stake in GDR then I think significant shareholders have to notify through every 1% threshold, but otherwise its 3% threshold on the way down as the last notifiable level as you say.